Editor's note: this article was updated on Apr. 30, 2020.
Back in February, unemployment was near record lows. That’s a great thing for the economy and anyone who wants a raise or new job. But when the COVID-19 pandemic came to America and we all started staying inside, that all changed. Fast.
More than 30 million people have filed for unemployment since mid-March. That’s a record, too. Just not the good kind. Here’s what a high unemployment rate can mean for your wallet.
It’ll be harder to get a new job. When a lot of people are out of work, competition heats up for available roles. Which may be few and far between in some industries. Psst...here’s how to make sure your application stands out.
Your company could freeze raises. High unemployment often goes hand in hand with economic downturns (cough, recessions, cough). When the economy’s bad, people spend less money. That hurts businesses...that won’t be in a hurry to hand out more money to employees. You can still ask. Just be prepared to possibly hear “not now.”
Your 401(k) might be sad. Since high unemployment is a sign businesses aren’t doing well, the stock market probably isn’t either. Bad economic news makes investors nervous and want to dump risky assets, like stocks. That can send prices, and account balances, down.
Uncle Sam might help out more. During really tough times, like now, the government can get more flexible with unemployment benefits to help people who’ve lost out on income. Check your state’s labor website for more info.
theSkimm: The COVID-19 pandemic has had a ripple effect on the job market and millions of Americans’ incomes. If you’ve lost your job, find out if you qualify for unemployment benefits. If you still have a job, you may not be able to get a bigger paycheck. But saving more now can help ease the pain if you need that safety net later.
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